Profile of Morgan Kelly

He is the Irish economist and sage who predicted the decline in property prices and also predicts future political chaos in Ireland. The profile, unnecessarily snarky at points, is here. We again see that economists who have studied economic history are proving especially wise during difficult times:

He was described by the Herald Tribune as "a specialist in medieval demographics"… "whose eyes burn with the passionate intensity of his prophesy".

Now he is forecasting mass mortgage defaults and an ugly popular uprising. The first stirrings are already visible, he says, with "anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America", giving rise to a new "hard-right, anti-Europe, anti-traveller party".

Gerry Adams, leader of Sinn Fein, has announced he's giving up his Westminster seat to go and be a candidate for the Irish parliamentary elections. Perhaps Westminster is getting a bit tame for him, and he's headed for where the action will be?

kevin dennyNovember 14, 2010 at 7:42 am

"Travellers" are an ethnic minority in Ireland who have a similar, part nomadic, life style to Roma/Gypsies but are not related. They are not generally popular with the settled community. Visitors to Ireland from Boston remain welcome: we need the hard currency.
While Morgan Kelly (a colleague of mine) may be hated in some quarters, in general, it is by those who got Ireland into this mess in the first place. Those without a vested interest generally respect him even if they may not agree with him completely.

SlocumNovember 14, 2010 at 8:58 am

Regardless of details of the looming catastrophe, its seems that it just can't get *that* bad for individual Irish citizens — I don't see how the can be made to spend the next N years of their lives paying exorbitant tax rates for threadbare government in order to pay off the debt because they're EU citizens and can vote with their feet. Once their house has been foreclosed, any remaining liquid assets are in Euros and are equally valuable everywhere else in the EU. But even if they leave with no assets at all, they're better off elsewhere. And then, of course, once an exodus gets underway, it becomes that much hard to squeeze blood out of the remaining turnips. This applies most strongly to those Irish with marketable skills–those that the country can least afford to have emigrate.

So it seems to me that Ireland will end up paying only what it can afford to pay without making life miserable enough to drive its productive citizens away. I expect somebody other than the Irish are going to end up eating most of the debt, because the Irish can't/won't do it (the individual Irish won't so the state of Ireland can't).

Yancey WardNovember 14, 2010 at 9:49 am

Wouldn't it an Irishman that warned us about the passionately intense?

SteveNovember 14, 2010 at 12:25 pm

Irish newspapers are incredible.

HighgammaNovember 14, 2010 at 4:54 pm

I was a student of Professor Kelly at Cornell. We studied the equity premium puzzle, Lucas tree model, and coordination problems. Must have made an impression since I remember most of it from 20 years ago.

RahulNovember 14, 2010 at 9:01 pm

I wish there was more coverage of economists whose predictions went bust. Often the coverage in blogs and newspapers concentrates on the so-called "sages" and "prophets" who presciently predicted this crisis or that recession.

But is this their skill or really just a probabilistic effect. If 100 economists make different predictions someone has to get it right in the end. But the perverse selection effect glorifies their "skill" in making predictions.

It is reminiscent of stock-picking in a way. We always hear of the fund-managers that consistently pick winners for their portfolios.

PaulGNovember 16, 2010 at 2:21 am

'unnecessarily snarky' doesn't do justice to the bitterness of the article. Its gets personal about one for the few economists who pointed out that the emperor was naked. Most of the economists in the Irish media were in the pay of the banks. These mouthpieces of our illustrious banking system, talked up Irish House prices, the health of the economy and the health of the banking system right up until the bust. Morgan Kelly was one of the few dissenting voices against the cosy mainstream so how could the Irish Independent possibly have a good word to say about him.

JustinNovember 16, 2010 at 4:58 am

Sounds like Professor Kelly is a realist about Ireland's current situation and understands the mistakes Ireland has made to get itself in this coming economic crisis. If Ireland and a few other European countries had listened to their "unappreciated" economists more maybe they would not all have such tough economic situations. Ireland should listen to its economists even if they go against the mainstream and say that changes need to be made. They have not done this so far in their own economic crisis and have paid the price for it seems it is going to get worse before it gets better.
I believe Ireland has no reason to not expect the worse in the coming years so people like Morgan Kelly should have a stronger influence on the government. Ireland, like many European countries, is experiencing economic problems that have been increasing steadily for months. Kelly understands this better than the "mainstream" economists it sounds like so why not have his opinion heard more often at a higher level of government.